9.3
8.521 reviews
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The past week has once again been exceptionally busy in the precious metals market. Not only do we receive many more orders than usual, but many customers also have questions about buying gold and silver. What's going on in the market? And why are coins and bars so much more expensive than the current prices of gold and silver? And can people still place an order now that we have run out of normal stock? In this article, we will update you on the latest developments in the market on the basis of frequently asked questions.
The spot price for precious metals such as gold and silver is determined on the futures market, where traders and speculators trade contracts for future delivery of precious metals. It is these paper claims on which the price of physical bullion is based. Under normal circumstances, 400 troy ounce (~12.5 kg) gold bars and 1,000 troy ounce (~31.1 kilo) silver bars are traded based on the paper spot price, plus a small mark-up for logistics. So this is the price for the raw material.
The situation is different when you want to physically order gold and silver in the form of coins or bars. These are produced by smelters and mints, who have to melt down the large bars of 400 troy ounces of gold and 1,000 troy ounces of silver and process them into smaller bars and coins. These costs are passed on in the price of investment coins and small bars.
On top of production costs and logistics costs, mints and suppliers may also charge an additional premium depending on the demand for precious metals. If the warehouses are full of stock, the premiums are low. If there is a rush for gold and silver and mints and suppliers cannot immediately meet the demand, they increase the premium. At the moment, the demand for coins and bars is so high that we are taking into account higher purchase prices. We have passed on these increased premiums in our product prices.
You also pay 21% VAT for silver bars, this arrangement does not apply to silver coins. Gold coins and gold bars are exempt from VAT. However, it is possible to buy silver without VAT, namely with silver bars in combination with storage in Switzerland. In Switzerland, silver is exempt from VAT. This is also the most economical way to purchase physical silver.
Normally, Holland Gold has the most common coins and bars in stock. Due to a run on physical bullion in the past few days, we have run out of stock. Due to the enormous demand, we can no longer deliver the products from stock, but we have to order them from mints and other suppliers. Because this applies to the whole of Europe and the United States, almost all traders have run out of stock. This has created a long queue at mints and smelters, which have to scale up production to meet the extra demand. At the time of writing, delivery times for gold bars are two to eight weeks, while delivery times for silver coins have increased from two to twelve weeks.
All products that we currently offer on our website can still be ordered from the supplier. That means you can still place an order, but delivery will take longer. As soon as you place an order, you lock in the price and we always hedge our position directly with physical bullion. This way we do not run any exchange rate risk and you have the guarantee that you will receive delivery for the agreed price. We keep our customers informed of delivery times via the weekly newsletter.
Because we are currently out of stock and delivery times have increased, we are unable to process counter purchases at this time. After all, we have to pre-finance orders for counter purchases and the delivery times are currently too long for that. Also, due to the coronavirus, we are currently unable to handle counter orders. We therefore advise customers to place their order via the website and pay online.
We understand that it is a big step to order precious metals online and pay immediately, especially when the delivery times are so long and you will only receive the precious metal in two to twelve weeks. As soon as you place an order, we buy the products directly from our suppliers. These are mints and smelters that have often been around for more than a hundred years. These companies have already endured several crises and even wars.
We as Holland Gold also have years of experience in this industry. In addition, Holland Gold is licensed by the AFM, which means that our activities are supervised by the financial supervisory authority. We have also helped a large number of customers with the purchase of precious metals over the years. More than 2,400 customers rate our service with a 9.4.
